This report helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. Contact your Foley relationship partner, or John R. Trentacosta or Ann Marie Uetz, to follow up.
Key developments
- IHS Markit lowered its global light vehicle
production forecast to 75.8 million units in
2021, and 82.6 million units in
2022, representing a downward adjustment of 6.2% and 9.3%,
respectively. The firm noted this is the largest single adjustment
to its outlook in the last nine months, and it expects ongoing
supply chain risk, particularly for semiconductors.
- U.S. new vehicle inventory is estimated at 1.08 million units at the
end of August, representing a 31 days' supply; this is a
decline of 57% from the same period one year ago.
- Wholesale used vehicle prices rose by 3.6% in the first 15 days of
September, compared to the previous month. The increase is attributed to ongoing inventory
challenges for new vehicles, and the demand for replacement
vehicles following Hurricane Ida.
- Intel CEO Pat Gelsinger predicts that semiconductors
will account for 20% of the cost of materials in a premium
passenger vehicle by 2030, up from 4% in 2019.The market
size for automotive semiconductors is expected
to nearly double to $115 billion by the end of the
decade, leading to the need to increase collaboration between automotive
and chip companies.
- GM will extend production cuts at six plants
in Michigan, Kansas, Missouri, Ontario, and Mexico due to the
ongoing chip shortage.
- NHTSA requested data on advanced
driver-assistance systems (ADAS) from 12 automakers, in order to
compare vehicles equipped with ADAS in the agency's
investigation into Tesla crashes that involved its Autopilot
system.
- Ford will partner with Argo
AI and Walmart to test an
autonomous vehicle delivery service for customers in certain areas
of Miami; Austin, Texas; and Washington D.C., beginning later this
year.
- Electric vehicles and low emissions
technology:
- Ford will invest $250 million to double the
production capacity of its all-electric F-150
Lightning pickup truck to 80,000 units per year; this
vehicle is scheduled for release in spring 2022.
- Rivian built its first production unit of the
R1T battery electric pickup truck, and the company begins
deliveries to customers this month.
- GM will extend a production shutdown
for Chevrolet Bolt EVs by three weeks as
it resolves battery issues that led to the
vehicles' recall.In addition, owners of certain Bolt vehicles
were told to park 50 feet from other vehicles in
parking structures, due to risk of vehicle fire.
- SK Innovation plans to split off its battery business, and the unit
is scheduled to launch first as a wholly-owned subsidiary next
month.
- Ford will invest $250 million to double the
production capacity of its all-electric F-150
Lightning pickup truck to 80,000 units per year; this
vehicle is scheduled for release in spring 2022.
Market Trends and Regulatory
- Iron and steel prices have nearly doubled in the past year,
according to commodity data tracked by the federal government. The
increase is attributed to high demand, as well as tariffs on
imported steel.
- NHTSA opened a new investigation into an
estimated 30 million U.S. vehicles with potentially defective Takata
airbag inflators. The probe covers 2001 through 2019 model
years and nearly two dozen automakers.
- Automotive and steel companies are working toward the long-term
goal of developing lower-carbon steel, as regulatory
pressures mount to increase sustainable manufacturing
processes.
- The U.S. Commerce Department and White House economic adviser
Brian Deese will host a meeting on
the semiconductor supply chain with
industry leaders on Sept. 23.
OEMs/Suppliers
- Production impact of the semiconductor
shortage –
- Stellantis announced downtime for
its Jefferson North Assembly
Plant in Detroit for the
week of September 20, affecting production of the Jeep Grand
Cherokee SUV.
- Volkswagen predicts the semiconductor shortage will
not improve until the second half of 2022.
- Stellantis announced downtime for
its Jefferson North Assembly
Plant in Detroit for the
week of September 20, affecting production of the Jeep Grand
Cherokee SUV.
- A GM joint
venture in China with
partners, SAIC Motor Corp. and Guangxi Automobile Group, said
it intends to increase the use of locally sourced
chips within the next five years. The comments were made during the World New
Energy Vehicle Congress, and the partners also said they have been
developing automotive chips since 2018.However, it was not clear if
the focus was chip design or manufacturing.
- Volvo is preparing for an initial public
offering "in the coming weeks," according to unnamed
sources in Reuters. Volvo and its parent
company, Geely Holding, did not comment for the article.
- Political action committee MoveOn has drawn
attention to GM for donating to
members of Congress who voted in January against certifying the
results of the 2020 presidential election.Earlier this
summer, Toyota's campaign contributions
were the subject of negative commentary by the Lincoln
Project.
- GM intends to make "substantial
shifts" in its supply chain,
including "building direct relationships"
with chip manufacturers, according to remarks by CEO Mary
Barra.
- Ford's Flat Rock Assembly
Plant resumed production September 20,
following a two-week shutdown caused by a gas leak.
Connected/Autonomous Vehicles and Mobility Services
- Tesla announced that its customers will
soon be able to request an enhanced version of its driver-assistance
software that is designed for city environments. However,
the National Transportation Safety
Board said the company should address safety concerns
in its existing technology before it offers expanded
features.
- China is developing a
system to monitor data that is sent abroad by
vehicles, according to a statement by the China Automotive
Engineering Research Institute Co. Automakers, including Tesla,
Ford, and BMW, recently indicated plans to set up local data
centers in China as the nation takes steps to increase oversight of
data collected by private firms.
Electric Vehicles and Low Emissions Technology
- Electronics contract manufacturing
company Foxconn has puts its EV project
with Byton on hold, due to the Chinese
startup's "worsening financial situation," according
to unnamed sources in Nikkei Asia.
- A Chinese startup backed by electric vehicle
maker Xpeng Inc. announced it will
deliver electric flying cars to
customers in 2024.
- Vitesco Technologies, a spin-off of
Continental that focuses on electrified
powertrains, began publicly trading on the Frankfurt Stock
Exchange last week.
- The Lucid Air luxury sedan received an EPA range rating of up to 520
miles on a full charge.This is the first EV to surpass a range
rating of 500 miles.
- According to a recent report from Earthjustice,
"widely deployed green hydrogen is still at least a decade
away," and green hydrogen is less efficient than using
renewable electricity. Green hydrogen does not produce greenhouse
gas emissions or use fossil fuels, but at this time hydrogen is
most typically produced by using fossil fuels.
Prepared by Julie Dautermann, Competitive Intelligence Analyst
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